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Why people lose money in Stock market

July 06, 2010  by: Rakesh  Points: 10   Category: Investment  Earning $0.50   Views: 2609

This article provides you details why people lose money in stock market. Avoid these principles and book profit from now.


Many people worrying about investing in stock market. As media focuses mainly on negative things, they write more stories of the people who lost in stock market. But they don't present why they lost in stock market.

This article presents you why people lose money in stock market.

1.When a stock is found at least price, they didn't study it and buy maximum amount of shares. Many times this leads to lose of entire money.

2.Waiting for more profit after achieving reasonable profit.

3.When the price of the stock falls, they buy more shares for averaging it. This leads to lose of entire money. (I personally experienced this!)

4.For saving tax, many people hold for longer time. This is very bad principle.

5.Holding of stocks which are trading at low price, thinking that price increase in the future.

6.If the market is increasing, then without studying the company buying the share at high price.
Ex: When the Sensex is at 21,000 many new people stepped into share market. They thought it is booming but finally they all lost their entire money.

7.For future needs, investing in the stock market. There is no guarantee for your money. These people don't study the company and invest money.

8.Keeping trust on brokers, without inquiring about the company. This leads to lose sometimes. So self study is needed.

9.Always thinking about stock market. This leads to anxiety.

10.Investing whole amount at a time rather than Investing in parts

11.Treating trading as main source of income.

Please avoid all these principles and book profit in stock market.

Author: rockstar        
Posted Date: 07/07/2010    Points:2    

There are many reasons because of which people loose money in stock market you can also write about some tips to avoid loosing money in stock market .
Author: Rakesh        
Posted Date: 07/07/2010    Points:2    

Hi Rockstar,

I try to follow your suggestion. I will do some research and write it.
Author: Mathi        
Posted Date: 07/07/2010    Points:5    

I accept your views.
But, people have the tendency that, quickly become a richer.
put money in share markets
In Chit Funds
In private agency,if they escaped,then guys will think I loose everything.
We needs money so do work and get money.
dont jump here and there.
be relax cool.
discuss with an expert in that field, then put some little amount
and wait for gaining experience not for money.
be ready to accept everything.

Author: Sushila S Iyengar        
Posted Date: 07/07/2010    Points:10    

Hi, Rakesh,

You have given certain points which are valid. Many people lost money because of some of those reasons mentioned by you.

One thing is sure, investing in stock market and expected returns from it is just a speculation. However, you study the market and invest intelligently, if one's luck is bad, then destiny takes him/her to loss.

I have had a very sad experience. A decade ago, I sold 300 Nos. of shares of Reliance Industries Ltd. ,after holding it for more than 5 years (at a good price of course). But soon after a few days, bonus shares of 1:1 was declared and the lucky buyer bagged that 300 additional shares. I got a great shock of my life. I can never forget this in my life time.

Author: Mathi        
Posted Date: 07/08/2010    Points:2    

Dear all

Experience makes a man perfect.

Author: winindia        
Posted Date: 07/08/2010    Points:10    

Well said rakesh, i want to add some more points who ever investing in stock market,they should decide there limit of loss and profit.

And the ration should go 2:1 for the profit and loss.

If out of your 100 Rupees you will be happy with rs10 then exit from stock market when you make lost of Rs5.

When you are making 10% and stock is going upwards still do not wait for more profits just book your profit at that time.

Because there are some trading where you can make double your money in a single day also.

Today on 8th july NIFTY 5400 call start trading from rs32 and it goes to Rs64 so 100% profit in a single day but it can turn down at full speed at any time so it is better to book your profit at your pre determined percentage of gain or loss
Author: Dinesh Xavier        
Posted Date: 03/30/2014    Points:3    

hi, nice article to deal with the losses of stock market.Though there are numerous reasons for the losses, i would like to say only two factors namely: GREEDY AND FEAR. These factors are highly responsible for the loss.Most of the people won''t book their profit at minimum percentage rather they are looking for a huge one and also when the share prices slips,people get a fear and they sell it immediately which leads to a loss.

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